Ofgem has awarded £8 million to 18 projects as part of the inaugural round of its £450 million Strategic Innovation Fund competition.
The Strategic Innovation Fund (SIF) was introduced as part of the RIIO2 price controls as a replacement for the Network Innovation Competition and is currently open to projects led electricity transmission and gas networks as well as National Grid Electricity System Operator (ESO).
The programme, conducted in partnership with Innovate UK, is intended to accelerate the decarbonisation of the energy system by addressing major strategic challenges faced by networks. For the first round, Ofgem has tasked participants with addressing four key challenges: heat, transport, whole system integration and data and digitalisation.
Back in March, Ofgem awarded up to £150,000 each to 40 projects to explore their potential as part of a two-month ‘Discovery’ phase, handing out nearly £4.6 million in total.
The regulator has now awarded up to £500,000 each to 18 projects to further develop their concepts as part of a six-month ‘Alpha’ phase starting in August. They will then compete for large-scale funding to demonstrate their ideas in the third and final ‘Beta’ phase.
Of 18 projects awarded funding, eight relate to data and digitalisation, five address whole system integration, three are focused on heat and two concern transport.
Seven of the projects were put forward by National Grid – four for gas transmission, two for electricity transmission and one by the ESO.
SGN secured funding for four projects, whilst fellow gas distribution networks Cadent and Northern Gas Networks were allocated funding for one each. The electricity transmission arms of SP Energy Networks and Scottish and Southern Electricity Networks were awarded funding for three and two projects respectively.
Ofgem director for strategy and decarbonisation Neil Kenward said: “Innovation in energy is a vital part of the process of bringing down the cost for energy consumers, accelerating the decarbonisation of our energy system and reducing our dependence on costly imported fossil fuels over time. We have to transform the way we travel, heat our homes, and fuel our industries, and energy networks will need to innovate accordingly.
“Ofgem set up the Strategic Innovation Fund to help accelerate this transition in a way that is fair and affordable for consumers.
“I am very pleased to see these innovative ideas progress from the feasibility study stage and take the next step towards becoming a reality. They are all part of a concerted drive which will help us diversify our energy supplies in the future, protecting consumers from future energy shocks while also protecting the planet.”
Matt Hastings, deputy director of the SIF programme at Innovate UK, said: “We can’t escape the urgency of achieving net zero and the massive pressures on consumers at this hugely challenging time for us all.
“The SIF is an optimistic ray of hope and seeing these 18 projects lining up to address some of key barriers in the road to net zero is something we feel proud to be part of. It’s only going to get better as these round one Alpha projects progress, and when we launch the round two Discovery stage competition later this year.”
Ofgem said the Discovery phase of round two will begin next month. Electricity distribution networks are already able to partner with other networks to participate in SIF projects but will not be able to lead them until after their RIIO2 price controls begin in April next year.